On the eve of House vote, McCaughey spews falsehoods about health reform


In a November 7 Wall Street Journal op-ed, serial health care misinformer Betsy McCaughey purported to provide "details you need to know" about the current version of health care reform legislation slated for a vote that same day in the House of Representatives. As with her previous descriptions of reform legislation, many of her claims are falsehoods or distortions, such as McCaughey's claim that illegal immigrants are exempted from a fine imposed by the bill.

McCaughey makes false, misleading claims about health care bill

McCAUGHEY'S CLAIM: Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.

On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer. [Wall Street Journal, 11/7/09]

REALITY: Secretary has 18 months from bill passage to define "qualified plan," but people are not required to have such plans until at least 2013. McCaughey does not explain how Section 224 is "like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later." Section 224 does state that "Not later than 18 months after the date of the enactment of this Act, the Secretary [of Health and Human Services] shall, through the rulemaking process consistent with subsection (a), adopt an initial set of benefit standards." However, nobody is required to purchase a qualified plan as defined by the Secretary of Health and Human Services until 2013, well after the Secretary will define the contours of a qualified plan. The bill provides: "On or after the first day of Y1, a health benefits plan shall not be a qualified health benefits plan under this division unless the plan meets the applicable requirements of the following subtitles for the type of plan and plan year involved." The term "Y1" is defined by the bill as the year 2013.

McCAUGHEY'S CLAIM: Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice-basic, enhanced and premium levels-but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill. [Wall Street Journal, 11/7/09]

REALITY: House bill provides for plans offering "additional benefits." McCaughey's claim that Sec. 303 "makes it clear" that the bill provides only a "one size fits all" package is false. McCaughey claims that the bill "claims to offer choice" and lists three levels of plans, "basic, enhanced and premium levels." But McCaughey ignores that the bill also includes a fourth choice: "premium-plus plans," which offer "additional benefits, such as adult oral health and vision care." From Sec. 303 of the House bill:




(1) IN GENERAL.-The Commissioner shall establish the following standards consistent with subsection and title II:

(A) BASIC, ENHANCED, AND PREMIUM PLANS.-Standards for levels of Exchange participating health benefits plans: basic, enhanced, and premium (in this division referred to as a ''basic plan'', ''enhanced plan'', ''premium plan'', respectively).

(B) PREMIUM-PLUS PLAN BENEFITS.-Standards for additional benefits that may offered, consistent with this subsection and subtitle C of title II, under a premium plan a plan with additional benefits referred this division as a ''premium-plus plan'').


(5) PREMIUM-PLUS PLAN.-A premium-plus plan is a premium plan that also provides additional benefits, such as adult oral health and vision care, approved by the Commissioner. The portion of the premium that is attributable to such additional benefits shall be separately specified.

McCAUGHEY'S CLAIM: Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement. [Wall Street Journal, 11/7/09]

REALITY: Bill exempts "nonresident aliens," not "illegal immigrants," and those terms are not equivalent. There is no Section 59b of the bill. Section 501 of the bill adds a Section 59b to the Internal Revenue Code and is on pages 296-299 of the bill as introduced, and this is presumably the section to which McCaughey is referring. That section does not mention "illegal immigrants." Rather, it provides exceptions to the tax for dependents, individuals residing outside the United States, residents of U.S. possessions, people who claim a "religious conscience exemption," and "nonresident aliens." But "nonresident aliens" are not the same as "illegal immigrants." Indeed, the IRS defines nonresident aliens as people without green cards who do not meet the following "substantial presence" test:

You will also be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

1. 31 days during the current year, and

2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:

o All the days you were present in the current year, and

o 1/3 of the days you were present in the first year before the current year, and

o 1/6 of the days you were present in the second year before the current year.

The IRS explicitly states that "even an undocumented (illegal) alien under the immigration laws who passes the Substantial Presence Test will be treated for tax purposes as a RESIDENT ALIEN."

McCAUGHEY'S CLAIM: In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions. [Wall Street Journal, 11/7/09]

REALITY: McCaughey doesn't back up her claim that the bill "permit[s] the government to dictate treatment decisions." Under a section entitled "Eviscerating Medicare," McCaughey purports to expose various sections of the House health reform bill that would, in part, "permit the government to dictate treatment decisions." However, McCaughey never substantiates her claim. As Media Matters for America has documented, McCaughey has previously falsely claimed that health care provisions in the economic recovery legislation would permit the government to control or interfere with doctors' treatment decisions.

McCAUGHEY'S CLAIM: Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."

The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis." [Wall Street Journal, 11/7/09]

REALITY: The "medical home" section expands a pilot program created by Republicans and can only be further expanded if the program improves quality. According to a Congressional Budget Office report cited in McCaughey's op-ed, "The Tax Relief and Health Care Act of 2006 mandated that the Centers for Medicare and Medicaid Services (CMS) establish a medical-home demonstration project. That project is expected to begin in January 2010; the results are expected to be available in December 2013." Thus, Congress passed a medical home demonstration project when President Bush was in office and Republicans controlled both houses of Congress. Furthermore, Section 1302 of the bill creates a pilot program that initially lasts no more than five years. The bill directs the government to evaluate the pilot program to determine the extent to which the medical homes pilot program results in "improvement in the quality and coordination of items and services under this title, particularly with regard to the care of complex patients"; "reductions in preventable hospitalizations"; "improvement in health outcomes, including patient functional status where applicable"; and "improvement in patient satisfaction." The bill further provides that the government can only make the plans permanent "if, and to the extent that such model or models, are beneficial to the program under this title, including that such implementation will improve quality of care, as determined by the Secretary [of Health and Human Services]." The House summary of Section 1302 of the bill states:

Sec. 1302. Medical home pilot program. An expansion and reorientation of the medical home demo in Medicare. Establishes a medical home pilot program to assess the feasibility of reimbursing for qualified patient-centered medical homes. There are two models in the provision: 1) the independent patient-centered medical home, structured around a provider, is targeted at the top half of high-need Medicare beneficiaries with multiple chronic diseases, and 2) the community based medical home, which may include any eligible beneficiary, is targeted at a broader population of Medicare beneficiaries and allows for State-based or nonprofit entities to provide care-management supervised by a beneficiary designated primary care provider. Provides approximately $1.8 billion for the pilot programs. The Secretary is authorized to expand the program only if quality measures have been met and budget neutrality is demonstrated.

McCAUGHEY'S CLAIM: A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority. [Wall Street Journal, 11/7/09]

REALITY: The CBO report did not say that medical homes were likely to resemble an unpopular plan. Indeed, CBO states, in part:

The medical-home concept has the potential to improve the health and health care of chronically ill Medicare beneficiaries. In some cases, improving care could reduce spending by eliminating duplicated services, making more appropriate use of specialists, and averting serious complications from chronic conditions through better medical management. In other cases, improving care could lead to increases in spending for chronically ill patients who were not receiving all recommended care.CBO cannot estimate whether the net result of those effects would be to increase or decrease spending for the Medicare program.

McCAUGHEY'S CLAIM: Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients. [Wall Street Journal, 11/7/09]

REALITY: Sec. 1114 adds physician assistants to currently recognized eligible hospice providers, including physicians and nurse practitioners. Contrary to McCaughey's suggestion that physicians are the only category of providers currently qualified to "oversee care for hospice patients," for purposes of hospice care, the section of the Social Security Act that Section 1114 is amending currently defines "attending physicians" to include both physicians and nurse practitioners. Consequently, Sec. 1114 would simply add physician assistants to that list, not "replac[ing]" physicians as eligible providers as McCaughey claimed [Tri-committee summary, 11/2/09]. From Sec. 1114 of the House bill:




(1) IN GENERAL.-Section 1861(dd)(3)(B) of such Act (42 U.S.C. 1395x(dd)(3)(B)) is amended-

(A) by striking ''or nurse'' and inserting '', the nurse''; and

(B) by inserting ''or the physician assistant (as defined in such subsection),'' after ''subsection (aa)(5)),''.

(2) CONFORMING AMENDMENT.-Section 1814(a)(7)(A)(i)(I) of such Act (42 U.S.C. 1395f(a)(7)(A)(i)(I)) is amended by inserting ''or a physician assistant'' after ''a nurse practitioner''.

McCAUGHEY'S CLAIM: Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida. [Wall Street Journal, 11/7/09]

REALITY: Bill does not "initiate programs" that require a reduction of payments "to what it costs in the lowest cost regions of the country." Secs. 1158-1160 do not, as McCaughey claimed, "initiate programs to reduce payments for patient care to what it costs in the lowest cost regions of the country." In fact, Sec. 1158 does just the opposite of what McCaughey claims, providing "any needed increases in payment rates and to 'hold harmless' providers that would otherwise have their payments reduced." [Tri-committee staff summary, 11/02/09]

Similarly, Secs. 1159 and 1160 do not necessarily mandate changes that lead to payment reductions concurrent with the "lowest cost regions of the country." Sec. 1159 requires the Institute of Medicine to conduct a study of "geographic variation in health care spending among all payers," including recommendations regarding "changes to Medicare payment systems to address such geographic variation and to improve the value of health spending in the program," and Sec. 160 requires the Health and Human Services Secretary to "develop an implementation plan for changing Medicare payment system" based on those recommendations [Tri-committee staff summary, 11/02/09]. According to the bill, those payment recommendations account for numerous factors, not simply cost-reduction, and do not necessarily require lowering payments across the country to match those in the "lowest cost regions":

(b) RECOMMENDATIONS.-Taking into account the findings under subsection (a) and the changes to the payment systems made by this Act, the Institute shall recommend changes to payment for items and services under parts A and B of title XVIII of the Social Security Act, for addressing variation in Medicare per capita spending for items and services (not including add-ons for graduate medical education, disproportionate share payments, and health information technology, as specified in sections 1886(d)(5)(F), 1886(d)(5)(B), 1886(h), 1848(o), and 1886(n), respectively, of such Act) by promoting high- value care (as defined in subsection (f)), with particular attention to high-volume, high-cost conditions. In making such recommendations, the Institute shall consider each of the following:

(1) Measurement and reporting on quality and population health.

(2) Reducing fragmented and duplicative care.

(3) Promoting the practice of evidence-based medicine.

(4) Empowering patients to make value-based care decisions.

(5) Leveraging the use of health information technology.

(6) The role of financial and other incentives affecting provision of care.

(7) Variation in input costs.

(8) The characteristics of the patient population, including socio-economic factors (including race, ethnicity, gender, age, income and educational status), and whether the beneficiaries are dually eligible for the Medicare program under title XVIII of the Social Security Act and Medicaid under title XIX of such Act.

(9) Other topics the Institute deems appropriate.

McCAUGHEY'S CLAIM: Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services." [Wall Street Journal, 11/7/09]

REALITY: Bill explicitly denies federal officials the authority to use comparative effectiveness research to dictate care. There is no Section 1402 of the bill. McCaughey is presumably referring to Section 1401, which appears on pages 733-761. Section 1401 explicitly states: "Nothing in this section shall be construed to make more stringent or otherwise change the standards or requirements for coverage of items and services under this Act.'' It also provides: "Nothing in this section shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine." McCaughey previously misrepresented a section of the stimulus bill dealing with comparative effectiveness research to claim that "Slipped into the bill was substantial funding for comparative effectiveness research, which is generally code for limiting care based on the patient's age."

McCAUGHEY'S CLAIM: While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability. [...] Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program." [Wall Street Journal, 11/7/09]

REALITY: The bill requires the government to establish quality guidelines. There is no Section 399V of the bill. McCaughey is presumably referring to Section 2530 of the bill, which begins on page 1422 and adds Section 399V to Title 42 of the U.S. Code. Section 2530 specifically requires the Secretary to "establish guidelines for assuring the quality of the training and supervision of community health workers under the programs funded under this section and for assuring the cost-effectiveness of such programs," and it requires the Secretary to monitor the programs to make sure they are in compliance with those guidelines.

McCAUGHEY'S CLAIM: While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability. [...] Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services. [Wall Street Journal, 11/7/09]

REALITY: Language service demonstration project requires Secretary review, IOM report. Section 222 of the bill defines the benefits that must be included in an essential benefits program. It does not discuss interpreter services and does not appear on page 617. McCaughey is presumably referring to Section 1222, which begins on page 617. McCaughey's suggestion that the demonstration project established in Sec. 1222 is subject to "vague standards of accountability" is false. In fact, Sec. 1222 "[r]equires the Secretary to evaluate the demonstration program," and Sec. 1223 "[r]equires the Secretary to contract with the Institute of Medicine to conduct a study that examines the impact on the quality of care, access to care, the reduction in medical errors and costs or savings associated with the provision of language access services to limited English proficient populations" [Tri-committee staff summary 11/2/09]. From Secs. 1222 and 1223 of the House bill:



(g) EVALUATION AND REPORT.-The Secretary shall conduct an evaluation of the demonstration program under this section and shall submit to the appropriate committees of Congress a report not later than 1 year after the completion of the program.



(a) IN GENERAL.-The Secretary of Health and Human Services shall enter into an arrangement with the Institute of Medicine under which the Institute will prepare and publish, not later than 3 years after the date of the enactment of this Act, a report on the impact of language access services on the health and health care of limited English proficient populations.

McCAUGHEY'S CLAIM: Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities." [Wall Street Journal, 11/7/09]

REALITY: House bill establishes numerous metrics by which it bases grant-awarding preference concerning nurse, health science education. Contrary to McCaughey's suggestion that Secs. 2521 and 2533 establish only "racial and ethnic preferences" for providing grants, both Sec. 2521, which pertains to nursing education, and Sec. 2533, which pertains to "secondary school health science training programs," outline a number of factors that impact how grants would be provided. From the bill:



(g) PREFERENCE.-In awarding grants under this section the Secretary shall give preference to programs that-

(1) provide for improving nurse retention;

(2) provide for improving the diversity of the new nurse graduates to reflect changes in the demographics of the patient population;

(3) provide for improving the quality of nursing education to improve patient care and safety;

(4) have demonstrated success in upgrading incumbent health care workers to become nurses or which have established effective programs or pilots to increase nurse faculty; or

(5) are modeled after or affiliated with such programs described in paragraph (4).




(d) PREFERENCE.-In awarding grants and contracts under subsection (b), the Secretary shall give preference to entities that have a demonstrated record of at least one of the following:

(1) Graduating a high or significantly improved percentage of students who have exhibited mastery in secondary school State science standards.

(2) Graduating students from disadvantaged backgrounds, including racial and ethnic minorities who are underrepresented in-

(A) associate's or bachelor's degree programs in health professions or bachelor's degree programs in health professions-related majors;


(B) health professions.

McCAUGHEY'S CLAIM: Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance. [Wall Street Journal, 11/7/09]

REALITY: McCaughey does not explain what's wrong with newborn enrollment provision. McCaughey includes her bullet about Medicaid enrollment of newborns as an example of a "questionable priorit[y]" but she does not explain what is problematic about this section, which provides that children who do not have insurance are deemed to be Medicaid-eligible for at least 60 days:


(1) IN GENERAL.-In the case of a child born in the United States who at the time of birth is not otherwise covered under acceptable coverage, for the period of time beginning on the date of birth and ending on the date the child otherwise is covered under acceptable coverage (or, if earlier, the end of the month in which the 60-day period, beginning on the date of birth, ends), the child shall be deemed

(A) to be a Medicaid eligible individual for purposes of this division and Medicaid; and

(B) to be automatically enrolled in Medicaid as a traditional Medicaid eligible individual (as defined in section 1943(c) of the Social Security Act).

(2) EXTENDED TREATMENT AS MEDICAID ELIGIBLE INDIVIDUAL.-In the case of a child described in paragraph (1) who at the end of the period referred to in such paragraph is not otherwise covered under acceptable coverage, the child shall be deemed (until such time as the child obtains such coverage or the State otherwise makes a determination of the child's eligibility for medical assistance under its Medicaid plan pursuant to section 1943(b)(1) of the Social Security Act) to be a Medicaid eligible individual described in section 1902(l)(1)(B) of such Act.

McCaughey is a serial misinformer on health care reform proposals

McCaughey is a serial misinformer who has perpetuated numerous falsehoods about health care reform. McCaughey has falsely claimed that a prior version of the House health care reform bill would "absolutely require" end-of-life counseling for seniors on Medicare "that will tell them how to end their life sooner" -- a claim that many in the media repeated. McCaughey repeatedly falsely claimed that the Senate HELP committee's bill "basically" "pushes everyone into an HMO-style plan." Additionally, McCaughey concocted the false claim, which was nonetheless widely repeated in the media, that a health IT provision in the economic recovery act enabled government bureaucrats to "monitor treatments" or restrict what "your doctor is doing" with regard to patient care. On multiple occasions, after being challenged on her false claims about health care legislation, McCaughey reportedly insisted that she was right about the ultimate effect of a bill despite misrepresenting what it actually said.

Media have repeatedly hosted McCaughey to discuss health reform. The Atlantic's Fallows has pointed to McCaughey as an example of someone for whom there "seems to be almost no extremity of being proven wrong which disqualifies" her from being given a platform in the media. Indeed, despite her numerous falsehoods and past conflicts of interest, throughout the health care reform debate in 2009, McCaughey has been an ever-present part of the media discussion. She has been hosted on CNN at least twice and on Fox News Channel repeatedly to weigh in on health care reform. Additionally, according to a search of the Nexis database, The Wall Street Journal and the New York Post have each published multiple op-eds by McCaughey about health reform; Bloomberg News also published a commentary by McCaughey on health care reform provisions in the recovery act.

McCaughey's work on health care reform has been marked by conflicts of interest concerns

McCaughey resigned from medical company board over "conflict of interest" concerns. McCaughey resigned from the board of directors of Cantel Medical Corp., a medical products company, in August to "avoid any appearance of a conflict of interest," as reported by The Washington Independent and confirmed in a Cantel press release.

McCaughey reported to be Big Tobacco shill during 1994 health care debate. Rolling Stone reported that in 1994, tobacco giant Philip Morris implemented a "strategy to derail Hillarycare," which included an "effort to 'work on the development of favorable pieces' with 'friendly contacts in the media' " -- specifically mentioning the company's collaboration with McCaughey on her 1994 New Republic hit piece on the Clintons' health care reform bill. Responding to the Rolling Stone article, McCaughey described as "outrageous and fictional" the charge that she "worked for a tobacco company in writing my critique of the dangers of the Clinton Plan. I did not."

Posted In
Health Care, Health Care Reform
Wall Street Journal
Betsy McCaughey
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